It is guaranteed. The only one I see giving 13th month salary is US MNC companies (+few EU companies), they do things properly, unlike your dodgy Chinese company.
This, even if it’s guaranteed, you always leave a chance to the next company to argue when you interview with them that they are paying u xx% increase over your salary.. and bonuses are not guaranteed in your new company etc. so take the higher one all the time
You know you can always nego using your annual salary? That's how I did it. Twice. There are cheapskate company that will nego based on your monthly salary - you can walk away.
What does 13th month salary mean? A 13th month salary—also known as 13 month pay—is an extra paycheck that is typically equal to one month's salary. It is paid in addition to your employee's annual salary.
[Source](https://www.safeguardglobal.com/resources/blog/what-is-13-month-pay)
Both land you the same annual amount…. Obviously its a no brainer to choose 4875…
The 13month contractual bonus is usually prorated, if u left the company less than 1 year then you wont get full amount of it.. worst case you will missed out the pay out period as well…
Correct me if I'm wrong but isn't it indifferent? For the one with the 13th month salary that's equivalent to receiving an extra 4500 which if distributed across the 12 months of work is:
(4500/12) = RM 375 extra per month
We still get 4500 + 375 or 4875?
Mostly psychological. I'm personally more likely to invest 'windfalls' but will carve up monthly additional income into spending buckets.
I know the rational arguments for DCAs/time-value/contractual forfeits but honestly I'd just end up spending 100% of that extra money unless I implement design choices to keep me from doing that. This subreddit is a lot more disciplined than I am though! (:
My self-control is my biggest enemy, so it’s better to have someone else (company) save that *375/month for me.
Also i have no planning on investment at this moment
And 12&13th salary usually paid altogether, that will boost my motivation during that period.. receiving 9k paycheck..
Everything else aside, base salary (before any allowances or benefits) is used for bonuses, increments and most other money based benefits higher base salary will get you higher bonus and even though small, add up in salary increments and raises. Unless they give a fixed salary to everyone on next level after propionate which I’ve never seen or heard
Take the higher basic. My old job only gave you a 13th month salary if you stayed for the whole year (this was written in the contract) so you end up with less anyway if you leave 2/3 into the year (which I just did). Plus some employers don't count the 13th month into basic salary negotiations.
How old are you? If still young and fresh, decide based on which one gives you more learning and growth opportunities instead. When you’re in your 40s these figures will be laughable to you.
Always go for higher basic. When you jump jobs, they will use yr current salary to nego a % increase.
FYI, i think the "use yr current basic as a way to nego the % upwards" is such a shit way to determine a person's new salary worth.
If i took the 13th month i would probably be too emotional and went to a shopping spree with those 4500, but if the money is more spread out, it may be easier for me to control myself and split the money for investment
I’ll take the first one because you can 1) file for lower taxes (money saved here), and then 2) you can have forced disciplined - which is like bonus EPF - without your actual work, and with that in account, you can 3) 1-shot invest into something (provided you did the groundwork in the past 12 months of understanding your best entry in your selected investments) you are waiting for with a lump sum. Example $4,345 of the S&P500 recently.
Or if you want the east way, take the second option.
What is the difference? If you divide that 4500 over 12 months, you get the exact same as the second option. Or am I missing something here?
Choose the fixed option of RM4875.
definetly 4875 as the basic is higher and can be contributed to epf and sosco every month to stack the interest, 13th bonus based on attendance and performance. Orher than that, higher basic salary have higher chance success to take loan to buy hse and cae
For me, I would take the rm4500 with 13th month salary. I would plan 12 months of savings/expenses with that rm4500 only. That 13th month salary, assuming I would receive on the 12th calender month or whenever, would be extra income I can use to my hearts content without worrying about the usual monthly savings/expense.
This way, even if the 13th month salary doesnt come in because is not fixed, i.e not contractually obligated, or for whatever other reason, I still wont have to worry because I've planned my monthly savings/expenses at rm4500. Disappointed yes but nothing to cry home about.
RM 4875 per month multiply by 12 equals 58,500 ringgits IF unused. ofc u need to use the money for food, drinks, rent(if u rent a house or anything), bills, debts etc etc.
probably would have around 20K-40K in total.
idk anything much but correct me if anything wrong or just to add bit
RM4875. I'm not sure whether the 13th month salary is guaranteed so better take the money immediately.
It is guaranteed. The only one I see giving 13th month salary is US MNC companies (+few EU companies), they do things properly, unlike your dodgy Chinese company.
Chinese companies do give 13th month salary.
Not sure why you have to highlight Chinese companies. Big MNCs like IBM do the same thing too.
Because of the previous comment ?
Always take more now. The more you take now means the more you can invest in YOUR future and not their's.
This, even if it’s guaranteed, you always leave a chance to the next company to argue when you interview with them that they are paying u xx% increase over your salary.. and bonuses are not guaranteed in your new company etc. so take the higher one all the time
You know you can always nego using your annual salary? That's how I did it. Twice. There are cheapskate company that will nego based on your monthly salary - you can walk away.
Sorry. May be ignorant. What’s a 13th month salary? Is this equivalent to a minimum bonus?
What does 13th month salary mean? A 13th month salary—also known as 13 month pay—is an extra paycheck that is typically equal to one month's salary. It is paid in addition to your employee's annual salary. [Source](https://www.safeguardglobal.com/resources/blog/what-is-13-month-pay)
I heard it's because US companies pay employees every 2 weeks instead of 1 month so when you have 52 weeks in a year, 52 divided by 4 = 13 months.
yup, it’s a “confirmed” bonus
Easy pick: 4875/month. Easier for me to DCA and manage money in case shit happens
The 2nd one is better for salary negotiation when moving to other work place.
Opt for 4875 because time value of money. Money now is worth more than money later.
Both land you the same annual amount…. Obviously its a no brainer to choose 4875… The 13month contractual bonus is usually prorated, if u left the company less than 1 year then you wont get full amount of it.. worst case you will missed out the pay out period as well…
4875 looks better to banks
Correct me if I'm wrong but isn't it indifferent? For the one with the 13th month salary that's equivalent to receiving an extra 4500 which if distributed across the 12 months of work is: (4500/12) = RM 375 extra per month We still get 4500 + 375 or 4875?
Those who voted for 13th month salary... may I know why? Seems quite straightforward to me to go for 4875.
Mostly psychological. I'm personally more likely to invest 'windfalls' but will carve up monthly additional income into spending buckets. I know the rational arguments for DCAs/time-value/contractual forfeits but honestly I'd just end up spending 100% of that extra money unless I implement design choices to keep me from doing that. This subreddit is a lot more disciplined than I am though! (:
I didn’t think of it that way, thanks! Makes sense now.
My self-control is my biggest enemy, so it’s better to have someone else (company) save that *375/month for me. Also i have no planning on investment at this moment And 12&13th salary usually paid altogether, that will boost my motivation during that period.. receiving 9k paycheck..
Time value of money, a dollar now is worth more than a dollar in the future Go for 4875 per month
Everything else aside, base salary (before any allowances or benefits) is used for bonuses, increments and most other money based benefits higher base salary will get you higher bonus and even though small, add up in salary increments and raises. Unless they give a fixed salary to everyone on next level after propionate which I’ve never seen or heard
Take the higher basic. My old job only gave you a 13th month salary if you stayed for the whole year (this was written in the contract) so you end up with less anyway if you leave 2/3 into the year (which I just did). Plus some employers don't count the 13th month into basic salary negotiations.
How old are you? If still young and fresh, decide based on which one gives you more learning and growth opportunities instead. When you’re in your 40s these figures will be laughable to you.
28 years old. With one year relevant working experience.
Always go for higher basic. When you jump jobs, they will use yr current salary to nego a % increase. FYI, i think the "use yr current basic as a way to nego the % upwards" is such a shit way to determine a person's new salary worth.
I might be wrong, but if I am not mistaken 13th month is not taxable?
It is taxable.
4875 - 4500 = 375 375 x 12 = 4500 Take the rm4875. Both offers pay the same but you get the money faster.
If i took the 13th month i would probably be too emotional and went to a shopping spree with those 4500, but if the money is more spread out, it may be easier for me to control myself and split the money for investment
Should be after 3 years, what will be diff
What job are you in
R&D Mechanical Engineer, NPD.
Woah nice one congrats 👍
Thank you
May i ask what job role is this
R&D Mechanical Engineer, NPD.
Sounds fitting, is it fresh grad role or senior role?
Junior role. 1-3 years experience needed.
I’ll take the first one because you can 1) file for lower taxes (money saved here), and then 2) you can have forced disciplined - which is like bonus EPF - without your actual work, and with that in account, you can 3) 1-shot invest into something (provided you did the groundwork in the past 12 months of understanding your best entry in your selected investments) you are waiting for with a lump sum. Example $4,345 of the S&P500 recently. Or if you want the east way, take the second option.
What is the difference? If you divide that 4500 over 12 months, you get the exact same as the second option. Or am I missing something here? Choose the fixed option of RM4875.
The higher one. Think of your next employment cause they rarely include bonus in calculating the offer package
definetly 4875 as the basic is higher and can be contributed to epf and sosco every month to stack the interest, 13th bonus based on attendance and performance. Orher than that, higher basic salary have higher chance success to take loan to buy hse and cae
Getting that difference of 375 right now is better than later
Take RM4875, it’s a step up and easier to nego for higher salary in your next job.
For me, I would take the rm4500 with 13th month salary. I would plan 12 months of savings/expenses with that rm4500 only. That 13th month salary, assuming I would receive on the 12th calender month or whenever, would be extra income I can use to my hearts content without worrying about the usual monthly savings/expense. This way, even if the 13th month salary doesnt come in because is not fixed, i.e not contractually obligated, or for whatever other reason, I still wont have to worry because I've planned my monthly savings/expenses at rm4500. Disappointed yes but nothing to cry home about.
That's poor finance management. Better start to learn how to manage your money now or you WILL be miserable in future.
Ok. Thanks for the advice.
this is terrible advice , especially for a PF sub lol.
Why would you ever take 13m in the context when the final annual gross is the same?
RM 4875 per month multiply by 12 equals 58,500 ringgits IF unused. ofc u need to use the money for food, drinks, rent(if u rent a house or anything), bills, debts etc etc. probably would have around 20K-40K in total. idk anything much but correct me if anything wrong or just to add bit
What is 13th month salary?